Today's Top 3 Crypto Gainers: Flow Surges on $725 Million Ecosystem Fund
- Flow is up on news of a fund to incentivize development on its platform.
- Maker seems to be up in response to the difficulties its competitor, Terra, is having maintaining the peg of its UST stablecoin.
- Polygon is up on news it will be one of the partners for Meta's NFT moves.
After a turbulent few days, these three cryptos are in the green today.
After a dramatic few days for investors, in which lead crypto Bitcoin (BTC) fell to its lowest point in 10 months, it's good to see some green in the crypto charts today. Several cryptos increased in value on the back of some big announcements. Find out more about today's top gainers, including what they do and why they are up.
1. Flow (FLOW) -- up 14%
Flow is an NFT-focused blockchain that was created by Dapper Labs, the same company behind CryptoKitties and NBA Top Shot. Top NFT marketplaces such as Rarible have already integrated the Flow blockchain, and others plan to follow suit.
Like many cryptocurrencies, Flow has had a tough year so far. However, this morning its price was up on news of a $725 million fund. The fund aims to incentivize development on the Flow blockchain, particularly those involving the development of apps, games, and digital assets in the Web3 space. It's backed by several big names in crypto, including a16z (Andreessen Horowitz), Coatue, Union Square Ventures, Greenfield One, Liberty City Ventures and CoinFund.
As various smart contract cryptos compete to gain market share, these types of funds are one way to stimulate activity on individual ecosystems. Flow says the funding will be available to new and existing developers globally.
2. Maker (MKR) -- up 10%
It isn't clear what's driving Maker's price up, but it could be a response to the de-pegging of Terra's UST stablecoin. The Maker protocol issues the dollar-pegged DAI stablecoin, a major competitor to UST. DAI held its value even in the face of extreme market conditions. UST, also a crypto-backed stablecoin, failed to do the same.
There are different ways stablecoins can maintain their pegs. Fiat-backed stablecoins such as Tether (USDT) and USD Coin (USDC) are supposed to keep $1 in reserve for each token they issue. UST is backed by Terra's native LUNA token, and uses algorithms to maintain its price by minting or burning LUNA or UST.
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The big difference between DAI and UST is that investors can lock up various crypto assets, including Bitcoin and Ethereum (ETH), to mint DAI. According to Crypto Briefing, DAI has maintained its peg even during periods of extreme volatility because DAI is overcollateralized.
3. Polygon (MATIC) -- up 8%
Polygon is a layer 2 solutions aggregator that sits on the Ethereum network. It offers developers various ways to improve Ethereum's performance, and its price gained an incredible 14,000% last year. The popular crypto gained even more value today on news of a partnership with Meta on its Instagram NFT plans.
In a video released yesterday, Meta CEO Mark Zuckerberg said it would begin testing NFT integrations with Instagram later this week. It looks like Polygon will be one of several blockchains that will work with Meta's NFT offering. According to CoinDesk, Meta will integrate with Ethereum, Polygon, Solana (SOL), and Flow.
After a turbulent few days, it's good to see some gainers today. However, we're not out of the woods yet -- and this is still a time for caution in crypto investing. There are a number of factors that could drive prices even lower, and wider economic conditions could mean we're in for a prolonged period of low prices.
Bear in mind that smaller altcoins carry more risk than established cryptos such as Bitcoin and Ethereum. Many altcoins did not survive the crypto winter of 2018. The golden rule of crypto investing applies: Only invest money you can afford to lose. That way, if the worst happens and crypto prices crash even further, it won't stop you achieving your other financial goals.
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Emma Newbery owns Bitcoin, Ethereum, Flow, USDC, Solana, and Polygon.
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